Exhibit 1.1
2,100,000 Shares Of Common Stock
UNDERWRITING AGREEMENT
New York, New York
_________ __, 1998
XXXXXXXX & CO. INC.
PRUDENTIAL SECURITIES
As Representatives of the several Underwriters
c/x Xxxxxxxx & Co. Inc.
Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
XXXXXXXXXX GRAPHICS INTERNATIONAL, INC., a New Jersey corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you and the other Underwriters named in Schedule I hereto
(collectively, the "Underwriters") for whom you are acting as Representatives
(the "Representatives") of the several Underwriters, 2,100,000 shares (the "Firm
Shares") of the Company's Common Stock, no par value (the "Common Stock"). In
addition, the Company proposes to grant to you and the other Underwriters an
option to purchase up to an additional 315,000 shares of the Company's Common
Stock (the "Option Shares"), on the terms and for the purposes set forth in
Section 2 hereof. The Firm Shares and the Option Shares are herein collectively
referred to as the "Shares."
1. The Company and Xxxxxxx X. Xxxxxxxxxx ("MRC") represent and warrant to,
and agree with, you that:
(a) A registration statement on Form S-1 (Registration No. 333-46541)
relating to the Shares, including a preliminary prospectus relating to the
Shares and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company
under the provisions of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Commission has not
issued any order preventing or suspending the use of the Prospectus (as
defined below) or any Preliminary Prospectus (as defined below). The term
"Preliminary Prospectus" as used herein means a preliminary prospectus
relating to the Shares, as contemplated by Rule 430 or Rule 430A ("Rule
430A") of the Rules and Regulations, included at any time as part of the
foregoing registration statement or any amendment thereto before it became
effective under the Act and any prospectus filed with the
Commission by the Company pursuant to Rule 424(a) of the Rules and
Regulations. Copies of such registration statement and amendments and of
each related Preliminary Prospectus have been delivered to the
Representatives. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become
effective will be filed promptly by the Company with the Commission. If
such registration statement has become effective, a final prospectus
relating to the Shares containing information permitted to be omitted at
the time of effectiveness by Rule 430A will be filed by the Company with
the Commission in accordance with Rule 424(b) of the Rules and Regulations
promptly after execution and delivery of this Agreement. The term
"Registration Statement" means the registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including all
financial statements and schedules and all exhibits, and all information
contained in any final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or in a term sheet described in
Rule 434 of the Rules and Regulations in accordance with Section 5 hereof
and deemed to be included therein as of the Effective Date by Rule 430A of
the Rules and Regulations. The term "Prospectus" means the prospectus
relating to the Shares as first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no such filing is required, the
form of final prospectus relating to the Shares included in the
Registration Statement at the Effective Date.
(b) On the date that any Preliminary Prospectus was filed with the
Commission, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), on the Closing Date and any Option
Closing Date and when any post-effective amendment to the Registration
Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement, each
Preliminary Prospectus and the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment or
supplement thereto), including the financial statements included in the
Prospectus, did or will comply in all material respects with all applicable
provisions of the Act and the Rules and Regulations, including containing
all statements required to be stated therein in accordance with the Act and
the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes effective,
no part of the Registration Statement or any such amendment did or will
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with
the Commission and at the Closing Date and, if later, the Option Closing
Date, the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 1(b) do not apply to any statements or omissions made in reliance
on and in conformity with information relating to any
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Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement or Prospectus or
any amendment or supplement thereto, it being understood that such
information includes the last paragraph on the cover page, the paragraph at
the bottom of the inside cover page, and the information in the third and
sixth paragraphs under the caption "Underwriting" in the Prospectus.
Neither the Company or MRC has distributed, nor, prior to the later to
occur of (i) the Closing Date or, if later, the Option Closing Date and
(ii) completion of the distribution of the Shares, will distribute, any
offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
expressly for use therein.
(d) On the Effective Date and the date the Prospectus is filed with
the Commission, and when any further amendment or supplements thereto
become effective or are filed with the Commission, as the case may be, the
Registration Statement, the Prospectus and such amendment or supplements
did and will conform in all material respects to the requirements of the
Act and the Rules and Regulations. On the Effective Date and the date the
Prospectus is filed with the Commission, and when any further amendment or
supplements thereto become effective or are filed with the Commission, as
the case may be, the Registration Statement, the Prospectus and such
amendment or supplements did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
expressly for use therein.
(e) Prior to the consummation of the offering of the shares of Common
Stock (the "Offering"), Xxxxxxxxxx Graphics, Inc. (the "Predecessor"), a
New Jersey corporation, will be reorganized (the "Reorganization") as
contemplated by the Reorganization Agreement dated as of _______ ___, 1998
(the "Reorganization Agreement"), a copy of which has been filed as Exhibit
2.1 to the Registration Statement, pursuant to which each of the
stockholders of the Predecessor will contribute all of their respective
shares of common stock, no par value, of the Predecessor to the Company in
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exchange for ________ shares of Common Stock, in the aggregate and
promissory notes in the aggregate principal amount of $_______ (the
"Exchange Notes"). As a result of consummation of the Reorganization, the
Predecessor will become a wholly-owned subsidiary of the Company. The
Reorganization will be consummated prior to the Closing in accordance with
the terms of the Reorganization Agreement. Concurrently with the
consummation of the Offering, the Company intends to repay the Exchange
Notes out of the net proceeds from the Offering.
(f) The Company has entered into an agreement dated January 16, 1998,
as amended (the "Roda Purchase Agreement"), whereby the Company will
acquire 100% of the share capital of Roda Limited ("Roda"), an English
corporation, in two stages. As a result of the consummation of the
Acquisition, Roda will become a wholly-owned subsidiary of the Company.
Pursuant to the Roda Purchase Agreement, concurrently with the consummation
of the Offering, the Company will (i) acquire all of the issued ordinary
share capital of Roda for an aggregate consideration of $6.3 million and
(ii) deliver into escrow $1.8 million, the aggregate redemption price for
all of the issued preference share capital of Roda, which the Company
intends to redeem on June 30, 1998.
(g) Set forth on Exhibit A attached hereto is a list of each
corporation that is, or will be upon consummation of the Reorganization,
directly or indirectly wholly-owned by the Company (collectively, the
"Subsidiaries"). Each Subsidiary is listed in Exhibit 21.1 to the
Registration Statement. Each of the Company and the Subsidiaries is, and at
the Closing Date and any Option Closing Date will be, duly organized,
validly existing and in good standing under the laws of its state of
organization. Each of the Company and the Subsidiaries has, and at the
Closing Date and the Option Closing Date will have, full corporate power
and authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
Each of the Company and the Subsidiaries is, and at the Closing Date and
the Option Closing Date will be, duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions in which
the nature of the activities conducted by it or the character of the assets
owned or leased by it makes such licensing or qualification necessary
except for jurisdictions in which the failure to be so licensed or
qualified would not have a material adverse effect on the business,
properties, condition (financial or otherwise), net worth, or results of
operations of the Company and the Subsidiaries, taken as a whole. The
Company, directly or indirectly, beneficially owns all of the outstanding
equity interests in each of the Subsidiaries, free and clear of all liens,
security interests, restriction, pledges, encumbrances, charges, equities,
claims, easements, assessments and tenancies (collectively,
"Encumbrances"), except as set forth in the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
Except with respect to the Subsidiaries and except as described in the
Registration Statement and Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus), the
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Company does not own, and at the Closing Date and any Option Closing Date
will not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, limited liability company, joint
venture, association or other entity. Complete and correct copies of the
charter and the bylaws or other organizational documents of the Company and
each Subsidiary and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(h) The outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and
are not subject to any preemptive or similar rights. The Company has, and,
upon completion of the sale of the Shares, will have, an authorized, issued
and outstanding capitalization as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus). The description of the securities of the
Company in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus)
is, and at the Closing Date and, if later, the Option Closing Date will be,
complete and accurate in all material respects. Except as set forth in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus), the Company does not
have outstanding, and at the Closing Date and, if later, the Option Closing
Date will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any shares of its
capital stock or any such warrants, convertible securities or obligations.
(i) The financial statements and the related notes and schedules of
the Company and the Predecessor set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus) present fairly, in all material respects,
the financial condition of the Company and the Predecessor as of the dates
indicated and the related Predecessor's statements of income, stockholders'
equity, and cash flows for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") which are applied on
a consistent basis throughout the entire period involved, except as
otherwise disclosed therein. The consolidated financial statements of Roda
set forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus)
present fairly, in all material respects, the financial condition of Roda
and its subsidiary as of the dates indicated and the related consolidated
profit and loss account and statement of cash flows for the periods covered
thereby, all in conformity with United Kingdom auditing standards, which do
not differ in any significant respect from GAAP, which are applied on a
consistent basis throughout the entire period involved, except as disclosed
therein. The summary financial data of the Company, the Predecessor and
Roda set forth under the captions "Prospectus Summary--
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Summary Financial Data" and "Selected Financial Data" in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus) have been prepared on a basis
consistent with the financial statements of the Company, the Predecessor
and Roda. The pro forma financial statements included in the Registration
Statement and the Prospectus comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission
and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of such statements. No other financial
statements or schedules of the Company, the Predecessor and Roda, or any
other entity are required by the Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Ernst & Young LLP
and Ernst & Young Chartered Accountants (collectively, the "Accountants"),
who have reported on those of such financial statements and schedules which
are audited, are independent accountants with respect to the Company, the
Predecessor and Roda as required by the Act and the Rules and Regulations.
(j) Each of the Company and the Subsidiaries maintains a system of
internal accounting control sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(k) Except as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
prior to the Closing Date and, if later, the Option Closing Date, (i) there
has not been, and will not have been (after giving effect to the
Reorganization and the Acquisition), any change in the capitalization of
the Company or any material adverse change in the business, properties,
condition (financial or otherwise), net worth or results of operations of
the Company and the Subsidiaries, taken as a whole, arising for any reason
whatsoever, (ii) none of the Company or any Subsidiary has incurred (after
giving effect to the Reorganization and the Acquisition), nor will any of
them have incurred any material liabilities or obligations, direct or
contingent, (iii) none of the Company or any Subsidiary has entered into,
nor will any of them have entered into (after giving effect to the
Reorganization and the Acquisition), any material transactions, other than
pursuant to this Agreement, the Reorganization Agreement or the Roda
Purchase Agreement, and (iv) none of the Company or any of the Subsidiaries
(after giving effect to the Reorganization and the Acquisition), has paid
or declared any dividends or other distributions of any kind on any class
of its capital stock, partnership interests or other equity securities.
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(l) Each of the Company and the Subsidiaries has valid, subsisting and
enforceable leases for the respective properties described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) as leased by them or by
the Company (collectively, the "Leased Properties"), in each case free and
clear of all Encumbrances, except as set forth in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus). All Encumbrances on or affecting the Leased Properties which
are required to be disclosed in the Registration Statement and Prospectus
are disclosed therein. The use and occupancy of each of the Leased
Properties complies with all applicable codes and zoning laws and
regulations and there is no pending or, to the knowledge of the Company and
MRC, threatened condemnation, zoning change, environmental or other
proceeding or action that will in any material respect adversely affect the
business, properties, condition (financial or otherwise), net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole.
(m) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act").
(n) Except as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), there are no actions, suits or proceedings pending
or threatened against or affecting the Company, any Subsidiary, or any
directors, officers or stockholders of any of the foregoing in their
capacity as such, before or by any Federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic
or foreign (collectively, a "Governmental Body"), wherein an unfavorable
ruling, decision or finding could be reasonably expected to adversely
affect the business, properties, condition (financial or otherwise), net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole.
(o) Except as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), each of the Company and the Subsidiaries has, and
at the Closing Date, the Option Closing Date (if any) will have, all
governmental licenses, permits, consents, orders, approvals, franchises,
certificates and other authorizations (collectively, "Licenses") necessary
to carry on its business and to own or lease and operate its properties as
contemplated in the Prospectus (or, if the Prospectus is not in existence,
in the most recent Preliminary Prospectus), except where the failure to
have any such License would not have a material adverse effect on the
business, properties, condition (financial or otherwise), net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole. Each of the Company and the Subsidiaries has complied, and at the
Closing Date and the Option Closing Date (if any) will have complied, in
all material respects with all laws, regulations, Licenses and orders
applicable to it or its business and properties. None of
7
the Company or any Subsidiary is, and, at the Closing Date and the Option
Closing Date (if any) none of them will be, in default (nor has any event
occurred which, with notice or lapse of time or both, would constitute a
default) in the due performance and observation of any term, covenant or
condition of any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument
(collectively, a "contract or other agreement") to which any of them is a
party or by which any of their respective properties is bound or affected,
which default would individually or in the aggregate have a material
adverse effect on the business, properties, condition (financial or
otherwise), net worth or results of operations of the Company and the
Subsidiaries, taken as a whole. To the best knowledge of the Company and
MRC, no other party under any such contract or other agreement is, or, at
the Closing Date or the Option Closing Date (if any) will be, in default in
any material respect thereunder. There are no governmental proceedings or
actions pending or threatened for the purpose of suspending, modifying or
revoking any License held by the Company or any Subsidiary. None of the
Company or any Subsidiary is in violation of any provision of its charter
or bylaws or other governing instrument.
(p) No consent, approval, authorization or order of, or any filing or
declaration with, any Governmental Body is required for the consummation of
the transactions contemplated by this Agreement or in connection with the
issuance and sale of the Shares by the Company in the Offering, except such
as have been obtained under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by the Company.
(q) Each of the Company and MRC has full power (corporate or other)
and authority to enter into this Agreement and to carry out all the terms
and provisions herein and therein to be carried out by it or him,
respectively. This Agreement has been duly authorized, executed and
delivered by each of the Company and MRC and constitutes a valid and
binding agreement of the Company and MRC and is enforceable against each of
the Company and MRC in accordance with the terms hereof. Except as
disclosed in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
the execution, delivery and the performance of this Agreement, the
Reorganization Agreement and the Roda Purchase Agreement and the
consummation of the transactions contemplated hereby and thereby will not
result in the creation or imposition of any Encumbrance upon any of the
assets of the Company or any Subsidiary pursuant to the terms or provisions
of, or result in a breach or violation of or conflict with any of the terms
or provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the charter or bylaws or other
organizational document of the Company or any Subsidiary, or (ii) any
material contract or other material agreement to which any of them is a
party or by which they or any of
8
their assets or properties are bound or affected, or (iii) any judgment,
ruling, decree, order, law, statute, rule or regulation of any Governmental
Body applicable to the business or assets of the Company or any Subsidiary.
The Company has full corporate power and authority to authorize, issue,
offer and sell the Shares, as contemplated by this Agreement, free of any
preemptive rights. The offer, issuance and sale by the Company of any
shares of its Common Stock prior to the date hereof complied with or was
exempt from the registration requirements of the Act and applicable state
securities and Blue Sky laws.
(r) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All contracts to which the Company is a party, that are material
to the operation of the business of the Company, have been duly authorized,
executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against the Company in
accordance with the terms thereof.
(s) Neither the Company nor any of its directors, officers or
affiliates (within the meaning of the Rules and Regulations) has taken, nor
will he, she or it take, directly or indirectly, any action designed, or
which might reasonably be expected in the future, to cause or result in,
under the Act or otherwise, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares or otherwise.
(t) No holder of securities of the Company has rights to the
registration of any securities of the Company as a result of the filing of
the Registration Statement.
(u) The Shares have been approved for listing on the Nasdaq National
Market System ("NASDAQ"), subject only to notice of issuance.
(v) No material labor dispute with the employees of the Company or
with the employees of any Subsidiary exists or is threatened or imminent.
(w) Except as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company or a Subsidiary owns, or is licensed
or otherwise has the full exclusive right to use, all material trademarks
and trade names which are used in or necessary for the conduct of its
business as described in the Registration Statement and Prospectus (or, if
the Prospectus is not in existence, in the most recent Preliminary
Prospectus). To the best knowledge of the Company and MRC, no claims have
been asserted by any person to the use of any such trademarks or trade
names or challenging or questioning the validity or effectiveness of any
such trademark or trade name. The use, in connection with the business and
operations of the Company, of such trademarks and trade names does not, to
the knowledge of the Company and MRC, infringe on the rights of any person.
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(x) None of the Company or any Subsidiary, nor, to the best knowledge
of the Company and MRC, any employee or agent of the Company or any
Subsidiary, has made any payment of funds of the Company or any Subsidiary
or received or retained any funds of the Company or any Subsidiary in
violation of any law, rule or regulation or of a character required to be
disclosed in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
(y) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the business in which the Company is engaged; none
of the Company or any Subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company or MRC has reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires.
(z) The business, operations and facilities of the Company and each
Subsidiary have been and are being conducted in compliance in all material
respects with all applicable laws, ordinances, rules, regulations,
Licenses, permits, approvals, plans, authorizations or requirements
relating to occupational safety and health, or pollution, or protection of
health or the environment (including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into
ambient air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous
or liquid in nature) of any governmental department, commission, board,
bureau, agency or instrumentality of the United States, any state or
political subdivision thereof, or any foreign jurisdiction, and all
applicable judicial or administrative agency or regulatory decrees, awards,
judgments and orders relating thereto; and none of the Company or any
Subsidiary has received any notice from governmental instrumentality or any
third party alleging any violation thereof or liability thereunder
(including, without limitation, liability for costs of investigating or
remediating sites containing hazardous substances and/or damages to natural
resources), except for such noncompliances, violations or liabilities that
would not have a material adverse effect upon the business, properties,
condition (financial or otherwise), net worth or results of operations of
the Company and the Subsidiaries, taken as a whole.
(aa) Each of the Company and the Subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof and has paid all taxes required to be paid by
it and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable.
(bb) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the
10
Shares and the application of the proceeds therefrom as may be required in
accordance with Rule 463 of the Rules and Regulations under the Act.
(cc) The Company and each of its executive officers and directors has
delivered to the Underwriters an agreement in the form set forth as Exhibit
B hereto to the effect that it, he or she will not, for a period of 180
days after the date hereof, without the prior written consent of Xxxxxxxx &
Co. Inc., offer to sell, sell, contract to sell, grant any option to
purchase or otherwise dispose (or announce any offer, sale, grant of any
option to purchase or other disposition) of any shares of Common Stock or
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock (except that the Company may grant options to purchase or
award shares of Common Stock under its stock option plans and issue
privately placed shares in connection with any acquisitions).
(dd) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
2. Subject to the terms and conditions herein set forth, the Company agrees
to sell to the several Underwriters, and each of the Underwriters, severally and
not jointly, agrees to purchase from the Company, at a purchase price of
$________ per share, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto, plus such number of Option Shares which
such Underwriter may become obligated to purchase pursuant to this Section 2.
In addition, subject to the terms and conditions herein set forth, the
Company agrees to sell to the several Underwriters, as required (for the sole
purpose of covering over-allotments in the sale of the Firm Shares), up to
315,000 Option Shares at a purchase price of $_____ per share. The right to
purchase the Option Shares may be exercised by the Representatives giving 48
hours' prior written or telephonic notice (subsequently confirmed in writing) to
the Company of their determination to purchase all or a portion of the Option
Shares. Such notice may be given at any time within a period of 30 days
following the date of this Agreement. No Option Shares shall be delivered to or
for the accounts of the several Underwriters unless the Firm Shares shall be
simultaneously delivered or shall theretofore have been delivered as herein
provided.
3. The Underwriter proposes to offer the Shares for sale to the public at
the " Price to Public " set forth on the cover page of the Prospectus and upon
the other terms and conditions set forth in the Prospectus.
4. The Firm Shares, in definitive form, to be purchased by the Underwriter
hereunder shall be delivered by or on behalf of the Company to you for your
account, against payment by you of the purchase price therefor by wire transfer
of immediately available funds to an account designated by the Company, at the
office of Stroock & Stroock & Xxxxx LLP, New
11
York, New York, at 9:30 A.M., New York City time, on __________ __, 1998, or at
such other time, date and place as you and the Company may agree upon in
writing, such time and date being herein called the "Firm Shares Delivery Date."
The Option Shares, in definitive form, to be purchased by the Underwriters
hereunder shall be delivered by or on behalf of the Company to the
Representatives for the accounts of the Underwriters against payment of the
purchase price thereof by wire transfer of immediately available funds to an
account designated by the Company, in New York, New York, at such time and on
such date (not earlier than the Firm Shares Delivery Date nor later than ten
business days after giving of the notice delivered by the Representatives to the
Company with reference thereto) and in such denominations and registered in such
names as shall be specified in the notice delivered by the Representatives to
the Company with respect to the purchase of such Option Shares. The date and
time of such delivery and payment are herein sometimes referred to as the
"Option Shares Delivery Date" (and either of the Option Shares Delivery Date or
the Firm Shares Delivery Date may be referred to herein as a "Delivery Date").
Certificates evidencing the Shares shall be in definitive form and shall be
in such denominations and registered in such names as the Representatives shall
request not less than 48 hours prior to the applicable Delivery Date,
respectively. Such Shares will be made available for checking and packaging in
New York, New York, at least 24 hours prior to the applicable Delivery Date.
5. The Company and MRC covenant and agree with the Underwriters that:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by any Underwriter or
dealer, file any amendment or supplement to the Registration Statement or
the Prospectus, unless a copy thereof shall first have been submitted to
the Representatives within a reasonable period of time prior to the filing
thereof and the Representatives shall not have objected thereto in good
faith.
(b) If the Registration Statement is not yet effective, the Company
will use its best efforts to cause the Registration Statement to become
effective not later than the time indicated in Section 7(a) hereof. The
Company will notify the Representatives promptly, and will confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective, (ii) of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (iv) of the happening
of any event during the period mentioned in the second sentence of Section
5(b) that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to
make the statements
12
therein, in light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, any Preliminary
Prospectus or the Prospectus. If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal of such order at
the earliest possible moment. The Company will prepare the Prospectus in a
form approved by the Representatives and will file such Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A, the
Company will use its best efforts to comply with the provisions of, and to
make all requisite filings with the Commission pursuant to, said Rule 430A
and to notify the Representatives promptly of all such filings.
(c) If, at any time when a Prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus or the Registration Statement to comply with the Act or the
Rules and Regulations, the Company will promptly notify the Representatives
thereof and, subject to Section 5(b) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects
such statement or omission or effects such compliance.
(d) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than 90 days after the
close of the period covered thereby, an earnings statement in form
complying with the provisions of Section 11(a) of the Act covering a period
of 12 consecutive months beginning not later than the first day of the
Company's fiscal quarter next following the Effective Date.
(e) The Company will file on a timely basis all documents required to
be filed with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act subsequent to the Effective Date and during any period when
the Prospectus is required to be delivered.
(f) The Company will comply with all the provisions of all
undertakings contained in the Registration Statement.
13
(g) During the period of three years commencing on the Effective Date,
the Company will furnish to each of the Representatives and each of the
Underwriters who may so request, a copy of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and
will furnish to each of the Representatives and each of the Underwriters
who may so request, a copy of each annual or other report it shall be
required to file with the Commission or NASDAQ and (ii) such additional
information concerning, the business and financial condition of the Company
as the Representatives may from time to time reasonably request in
connection with your obligations hereunder.
(h) The Company will apply the net proceeds from the sale of the
Shares in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(i) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(j) The Company will not for a period of 180 days after the date
hereof, without the prior written consent of Xxxxxxxx & Co. Inc., offer to
sell, sell, contract to sell, grant any option to purchase or otherwise
dispose (or announce any offer to sell, sale, contract to sell, grant of
any option to purchase or other disposition) of any shares of Common Stock
or any securities convertible into or exchangeable for shares of Common
Stock (except that the Company may grant options to purchase or award
shares of Common Stock under its stock option plans and may issue privately
placed shares in connection with any acquisitions).
(k) Prior to any Delivery Date there will not be any change in the
capital stock or material change in the short-term debt or long-term debt
of the Company or any of its Subsidiaries, or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company or any of its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(l) The Company has caused the Shares to be authorized for quotation
on NASDAQ upon notice of issuance.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid: (i) the fees, disbursements and expenses
of counsel and accountants for the Company, and all other expenses, in
connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and any amendments and supplements thereto and the
furnishing of copies thereof, including charges for mailing, air freight and
delivery and counting and packaging thereof and of any Preliminary Prospectus
and related offering documents to the Underwriters and dealers; (ii) the cost of
printing this
14
Agreement, communications with the Underwriters and selling group and the
Preliminary and Supplemental Blue Sky Memoranda and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the exemption of the Shares for offering and
sale under securities laws as provided in Section 5(b) hereof, including the
fees, disbursements and expenses for counsel for the Underwriters in connection
with such exemption and in connection with Blue Sky surveys or similar advice
with respect to sales; (iv) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the sale of the Shares; (v) all fees
and expenses in connection with the quotation of the Shares on NASDAQ; and (vi)
all other costs and expenses incident to the performance of the Company's
obligations hereunder that are not otherwise specifically provided for in this
Section 6, including the fees of the Company's Transfer Agent and Registrar, the
cost of any stock issue or transfer taxes on sale of the Shares to the
Underwriters, the cost of the Company's personnel and other internal costs, the
cost of printing and engraving the certificates representing the Shares and all
expenses and taxes incident to the sale and delivery of the Shares to be sold by
the Company to the Underwriters hereunder. It is understood, however, that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers that they may make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to (i) the condition that all representations and warranties and
other statements of the Company and MRC herein are true and correct in all
material respects, when made and on each Delivery Date, (ii) the condition that
the Company and MRC shall have performed each of their respective obligations
hereunder theretofore to be performed and (iii) the following additional
conditions:
(a) The Registration Statement shall have become effective, and the
Representatives shall have received notice thereof not later than 10:00
P.M., New York City time, on the date of execution of this Agreement, or at
such other time as you and the Company may agree and the Prospectus shall
have been filed with the Commission in the manner and within the time
period required by Rule 424(b).
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
be pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the exemption of the Shares
under the securities or Blue Sky laws of any jurisdiction shall be in
effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of
the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have
15
been filed unless a copy thereof was first submitted to the Underwriters
and the Underwriters did not object thereto in good faith, and the
Underwriters shall have received certificates, dated the Closing Date and
the Option Closing Date and signed by the Chief Executive Officer of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and
belief), to the effect of the foregoing clauses (i), (ii) and (iii) of this
Section 7.
(c) The Representatives shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact or omits to state a fact
which in the Underwriters' judgment is in either case material and in the
case of an omission is required to be stated therein or is necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(d) Xxxxxxx, Del Deo, Dolan, Grifflinger & Xxxxxxxxx, P.C., counsel to
the Company, shall have furnished to the Representatives their written
opinion, dated such Delivery Date, in form and substance satisfactory to
the Representatives, to the effect that:
(i) Each of the Company and the Subsidiaries (A) has been duly
incorporated or organized and is a validly existing corporation in
good standing under the laws of its jurisdiction of incorporation or
organization with full corporate power and authority to own or lease
and to operate its assets and to conduct its business as described in
the Registration Statement and Prospectus and (B) is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction (x) in which the conduct of its business requires such
qualification and (y) in which it owns or leases property;
(ii) To the knowledge of such counsel, the Company owns no
capital stock or other beneficial interest in any corporation,
partnership, joint venture or other business entity except for equity
interests in the Subsidiaries and except as set forth in the
Registration Statement;
(iii) The Shares have been validly authorized, duly executed by
authorized officers of the Company, and are the validly issued,
outstanding and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization moratorium and other similar laws relating
to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(iv) The Company has authorized capital stock as set forth in the
Registration Statement and all of the authorized shares of Common
Stock, have been duly authorized, and have been duly reserved for
issuance, and all of the
16
issued and outstanding shares of Common Stock will be validly issued
and outstanding, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof; all of the outstanding
shares of Common Stock were issued and sold in compliance with all
applicable Federal and state securities laws; except as described in
the Prospectus and except with respect to existing stock incentive or
stock purchase plans to the knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the issuance
of, and there are no commitments, plans or arrangements to issue any
shares of capital stock of the Company;
(v) To the best of such counsel's knowledge, except as set forth
in the Prospectus, there are no legal or governmental proceedings
pending or threatened to which the Company or any Subsidiary or any of
their respective officers or directors is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if resolved against the Company or any Subsidiary or any of
their respective officers or directors, individually, or to the extent
involving related claims or issues, in the aggregate, is of a
character required to be disclosed in the Prospectus which has not
been properly disclosed therein;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company;
(vii) The Company has full corporate power and authority to
execute, deliver and perform this Agreement and the delivery and
performance of this Agreement, the consummation of the transactions
herein contemplated and the issue and sale of the Shares and the
compliance by the Company with all the provisions of this Agreement,
will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, claim or encumbrance upon
any of the property or assets of the Company or any Subsidiary
pursuant to, the terms of any material contract or other agreement
known to such counsel to which the Company or any Subsidiary is a
party or by which the Company or Subsidiary is bound or to which any
of the respective property or assets of the Company or Subsidiary is
subject, nor will such action result in any violation of the
provisions of the charter or bylaws or partnership agreement or
operating agreement, in each case as amended, of the Company or any
Subsidiary, any statute or any rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or the terms of any judgment, decree or order, known
to such counsel, of any arbitrator or Governmental Body having such
jurisdiction;
17
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court or any regulatory authority or
other governmental body is required for the issue and sale of the
Shares or the consummation of the other transactions contemplated by
this Agreement, except such as have been obtained under the Act or may
be required by the NASD, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
(ix) To the best of such counsel's knowledge, neither the Company
nor any Subsidiary is currently in violation of its charter or bylaws
or other organizational documents in each case as amended to the date
hereof, or in material default under any indenture, mortgage, deed of
trust, lease, bank loan or credit agreement or any other agreement or
instrument of which such counsel has knowledge to which the Company or
any Subsidiary is a party or by which any of them or any of their
respective property may be bound or affected;
(x) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
Shares pursuant to the Company's Charter or Bylaws, in each case as
amended to the date hereof, or any agreement or other instrument known
to such counsel; and no holders of securities of the Company have
rights to the registration thereof under the Registration Statement;
(xi) To the extent summarized therein, all contracts and
agreements summarized in the Registration Statement and the Prospectus
are fairly summarized therein, conform in all material respects to the
descriptions thereof contained therein, and, to the extent such
contracts or agreements or any other material agreements are required
under the Act or the rules and regulations thereunder to be filed or
incorporated by reference therein, as exhibits to the Registration
Statement, they are so filed or incorporated by reference; and such
counsel does not know of any contracts or other documents required to
be summarized or disclosed in the Prospectus or to be so filed or
incorporated by reference as an exhibit to the Registration Statement,
which have not been so summarized or disclosed, or so filed or
incorporated by reference;
(xii) All descriptions in the Prospectus of statutes, regulations
or legal or governmental proceedings are fair summaries thereof and
fairly present the information required to be shown with respect to
such matters;
(xiii) The Registration Statement is effective under the Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement or any amendment
18
thereto has been issued, and to the knowledge of such counsel no
proceedings for that purpose have been instituted or are pending or
are threatened or contemplated under the Act; the registration
statement originally filed with respect to the Shares and each
amendment thereto and the Prospectus and, if any, each amendment and
supplement thereto (except for the financial statements, schedules and
other financial and statistical data included therein, as to which
such counsel need not express any opinion), complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; the descriptions contained and summarized in the
Registration Statement and the Prospectus of contracts and other
documents are accurate and fairly present in all material respects the
information required to be shown by the Act and the Rules and
Regulations; to the knowledge of such counsel, there are no contracts
or documents which are required by the Act to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement which are not described or filed as
required by the Act and the Rules and Regulations; to the knowledge of
such counsel, there is not pending or threatened against the Company
any action, suit, proceeding or investigation before or by any
Governmental Body of a character required to be disclosed in the
Registration Statement or the Prospectus which is not so disclosed
therein; and the statements set forth under the headings "The
Company--The Reorganization," "--The Roda Acquisition,"
"Business--Government Regulation," "Business--Litigation," "Certain
Transactions" and "Description of Capital Stock" in the Registration
Statement and Prospectus, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, provide an accurate summary of such legal matters, documents
and proceedings;
(xiv) The Shares conform as to legal matters, in all material
respects, to the statements concerning them in the Registration
Statement and the Prospectus;
(xv) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act; and
(xvi) The Shares have been duly authorized for listing on NASDAQ,
subject only to official notice of issuance.
In addition, such counsel shall state that in the course of the preparation
of the Registration Statement and the Prospectus, such counsel has participated
in conferences with officers and representatives of the Company and with the
Accountants, at which conferences such counsel made inquiries of such officers,
representatives and Accountants and discussed the contents of the Registration
Statement and the Prospectus and (without taking any further action to verify
independently the statements made in the
19
Registration Statement and the Prospectus (other than the sections identified in
paragraph (xiii) above and, except as stated in the foregoing opinion, without
assuming responsibility for the accuracy, completeness or fairness of such
statements) nothing has come to such counsel's attention that causes such
counsel to believe that the Registration Statement as of the date it was
declared effective or as of the Closing Date or the Prospectus as of the date
thereof or as of the Closing Date contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need not express any opinion with respect to the financial
statements, schedules and other financial and statistical data included in the
Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any State other than New Jersey (to the extent
satisfactory in form and scope to counsel for the Underwriters) such counsel may
rely upon the opinion of local counsel to the Company. The foregoing opinion
shall also state that the Underwriters are justified in relying upon such
opinion of local counsel, and copies of such opinion shall be delivered to the
Underwriters and counsel for the Underwriters.
(f) Stroock & Stroock & Xxxxx LLP, counsel to the Underwriters, shall have
furnished to the Representatives their written opinion or opinions, dated such
Delivery Date, in form and substance satisfactory to the Representatives, with
respect to the incorporation of the Company, the validity of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters. In rendering such opinion, such counsel may rely as to
all matters of New Jersey law upon the opinion of Xxxxxxx, Del Deo, Dolan,
Griffinger & Xxxxxxxxx, P.C.; Newark, New Jersey.
(g) With respect to the letter of Ernst & Young LLP delivered to you
concurrently with the execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Representatives a letter (as used in this
paragraph, the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
20
(h) Neither the Company nor any of its subsidiaries shall have sustained
since the date as of which information is given in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and since the respective dates as of which
information is given in the Prospectus, there shall not have been any change in
the capital stock (other than shares issued pursuant to the exercise of stock
options or pursuant to the terms of the Shares) or short-term debt or long-term
debt of the Company or any Subsidiaries nor any change or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case, is in your judgment so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(i) Between the date hereof and such Delivery Date there shall have been no
declaration of war by the Government of the United States; on such Delivery Date
there shall not have occurred any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or other calamity or crisis, the effect of which is such as to make
it, in the judgment of the Representatives, impracticable to market the Shares
or to enforce contracts for the resale of Shares and no event shall have
occurred resulting in (i) trading in securities generally on the New York Stock
Exchange (the "NYSE") or in the Common Stock on NASDAQ being suspended or
limited or minimum or maximum prices being generally established on the NYSE or
NASDAQ, or (ii) additional material governmental restrictions, not in force on
the date of this Agreement, being imposed upon trading in securities generally
by the NASD or in the Common Stock on NASDAQ or by order of the Commission or
any court or other governmental authority, or (iii) a general banking moratorium
being declared by either Federal or New York authorities.
(j) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the President of the Company, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, (x) the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and (y) the Prospectus does not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the
21
statements therein, in light of the circumstances under which they were
made, not misleading and (B) since the Effective Date no event has occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect;
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects; and
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with.
(k) The Company shall have delivered to you evidence that the Shares have
been authorized for quotation on NASDAQ upon notice of issuance.
(l) At the Closing Date, and as to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives, a certificate from MRC,
signed by MRC, dated the Closing Date, to the effect that:
(i) He has carefully examined the Registration Statement and the
Prospectus and (A) as of the date of such certificate, (x) the Registration
Statement does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and (y) the Prospectus
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading and (B) since the Effective Date no event has occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect;
(ii) Each of the representations and warranties of MRC contained in
this Agreement were, when originally made, and are, at the time such
certificate is delivered, true and correct in all material respects; and
(iii) Each of the covenants required herein to be performed by MRC on
or prior to the date of such certificate has been duly, timely and fully
performed and each condition herein required to be complied with by MRC on
or prior to the delivery of such certificate has been duly, timely and
fully complied with.
22
8. (a) The Company and MRC, jointly and severally, will indemnify and hold
harmless each Underwriter for any losses, claims, damages or liabilities to
which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or filed with the Commission or any securities association or
securities exchange (each, an "Application"), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company or MRC in Section 1 of
this Agreement, or (iii) the employment by the Company or MRC of any device,
scheme or artifice to defraud, or the engaging by the Company or MRC in any act,
practice or course of business which operates or would operate as a fraud or
deceit, or any conspiracy with respect thereto, in which the Company or MRC
shall participate, in connection with the issuance and sale of any of the
Shares, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating,
preparing to defend, defending or appearing as a third-party witness in
connection with any such action or claim; provided, however, that neither the
Company or MRC shall be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission relating
to any Underwriter made in any Preliminary Prospectus, the Registration
Statement, or the Prospectus or such amendment or supplement or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter expressly for use therein; and provided, further,
that, the indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
persons controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Shares to any person, if such
Underwriter fails to send or give a copy of the Prospectus, as the same may be
then supplemented or amended, to such person, within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission to state a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(b) hereof.
The indemnity agreement in this Section 8(a) shall be in addition to any
liability which the Company and MRC may otherwise have and shall extend upon the
same terms and conditions to each person, if any, who controls any Underwriter
within the meaning of the Act or the Exchange Act.
(b) Each Underwriter will indemnify and hold harmless the Company and
MRC against any losses, claims, damages or liabilities to which the Company or
MRC may become subject, under the Act or otherwise, insofar as such losses,
claims, damages
23
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or any Application, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement or any Application in reliance upon and in
conformity with written information furnished by such Underwriter to the Company
through the Representatives relating to such Underwriter expressly for use
therein, and will reimburse the Company and MRC for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim.
The indemnity agreement in this Section 8(b) shall be in addition to
any liability which the Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the Company or
MRC and to each person, if any, who controls the Company or MRC within the
meaning of the Act or the Exchange Act.
(c) Promptly after receipt by an indemnified party under Section 8(a)
or 8(b) of notice of the commencement of any action (including any governmental
investigation), such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party under Section 8(a) or 8(b) except to the
extent it was unaware of such action and has been prejudiced in any material
respect by such failure or from any liability which it may have to any
indemnified party otherwise than under such Section 8(a) or 8(b). In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
If, however, (i) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party or
(ii) an indemnified party shall have reasonably concluded that representation of
such indemnified party and the indemnifying party by the same counsel would be
inappropriate
24
under applicable standards of professional conduct due to actual or potential
differing interests between them and the indemnified party so notifies the
indemnifying party, then the indemnified party shall be entitled to employ
counsel different from counsel for the indemnifying party at the expense of the
indemnifying party and the indemnifying party shall not have the right to assume
the defense of such indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
local counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with respect to which
fees and expenses shall be so reimbursed shall be designated in writing by
Xxxxxxxx & Co. Inc. in the case of parties indemnified pursuant to Section 8(a)
and by the Company and MRC in the case of parties indemnified pursuant to
Section 8(b). If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel to which such indemnified party is entitled under Section 8(a) or 8(b),
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) In order to provide for just and equitable contribution under the
Act in any case in which (i) any Underwriter (or any person who controls any
Underwriter within the meaning of the Act or the Exchange Act) makes a claim for
indemnification pursuant to Section 8(a) hereof, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that Section 8(a) provides for indemnification in such case or (ii)
contribution under the Act may be required on the part of any Underwriter or any
such controlling person in circumstances for which indemnification is provided
under Section 8(b), then, and in each such case, each indemnifying party shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject as an indemnifying party hereunder (after contribution from
others) in such proportion as is appropriate to reflect the relative benefits
received by the Company and MRC on the one hand and the Underwriters on the
other from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 8(c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to
25
reflect not only such relative benefits but also the relative fault of the
Company and MRC on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and MRC
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by the
Company and MRC bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or MRC on the one hand or the Underwriters on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, MRC
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation (even if the Underwriters were
treated as one entity for such purpose) which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
8(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section 8(d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) Promptly after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding, such party will, if a claim
for contribution in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the commencement
thereof, but the omission so to notify the contributing party will not relieve
it from any liability which it may have to any other party for contribution
under the Act except to the extent it was unaware of such action and has been
prejudiced in any material respect by such failure or from any liability which
it may have to any other party other than for contribution under the Act. In
case any such action, suit or proceeding is brought against any party, and such
party notifies a
26
contributing party of the commencement thereof, the contributing party will be
entitled to participate therein with the notifying party and any other
contributing party similarly notified.
9. (a) If, on either Delivery Date, any Underwriter shall default in its
obligation to purchase the Shares which it has agreed to purchase on such
Delivery Date, the Representatives may in their discretion arrange for them or
another party or other parties to purchase such Shares on the terms contained
herein. If the aggregate principal amount of Shares as to which Underwriters
default on either Delivery Date is more than one-eleventh of the aggregate
principal amount of all Shares to be purchased on such Delivery Date and within
36 hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Shares which such defaulting Underwriter agreed
but failed to purchase, then the Company shall be entitled to a further period
of 36 hours within which to procure another party or other parties satisfactory
to the Representatives to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, the Representatives notify the Company
that the Representatives have so arranged for the purchase of such Shares, or
the Company notifies the Representatives that it has so arranged for the
purchase of such Shares, the Representatives or the Company shall have the right
to postpone such Delivery Date for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of such defaulting Underwriter or Underwriters by the Representatives
or the Company or both as provided in subsection (a) above, the aggregate
principal amount of such Shares of such defaulting Underwriter or Underwriters
which remain unpurchased does not exceed one-eleventh of the aggregate principal
amount of all the Shares to be purchased on such Delivery Date, then the Company
shall have the right to require each nondefaulting Underwriter to purchase the
principal amount of the Shares which such nondefaulting Underwriter agreed to
purchase hereunder and, in addition, to require each nondefaulting Underwriter
to purchase its pro rata share (based on the principal amount of Shares which
such nondefaulting Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Representatives or
the
27
Company as provided in subsection (a) above, the aggregate principal amount of
such Shares of such defaulting Underwriter or Underwriters which remain
unpurchased exceeds one-eleventh of the aggregate principal amount of all Shares
to be purchased on such Delivery Date, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate without liability on the part of any
nondefaulting Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 6 hereof and the
indemnity agreement in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or an officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. This Agreement shall become effective (a) if the Registration Statement
has not heretofore become effective, at the earlier of 12:00 Noon, New York City
time, on the first full business day after the Registration Statement becomes
effective, or at such time after the Registration Statement becomes effective as
the Representatives may authorize the sale of the Shares to the public by the
Underwriters or other securities dealers, or (b) if the Registration Statement
has heretofore become effective, at the earlier of 24 hours after the filing of
the Prospectus with the Commission or at such time as the Representatives may
authorize the sale of the Shares to the public by the Underwriters or securities
dealers, unless, prior to any such time (i) the Representatives shall have
received notice from the Company that it elects that this Agreement shall not
become effective, or (ii) the Representatives shall have given notice to the
Company that the Underwriters have elected that this Agreement shall not become
effective; provided, however, that the provisions of this Section and Section 6
and Section 8 hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 hereof, or if
this Agreement, by election of the Underwriters, shall not become effective
pursuant to the provisions of this Section, the Company shall not then be under
any liability to any Underwriter except as provided in Section 6 and Section 8
hereof, but if this Agreement becomes effective and is not so terminated but the
Shares are not delivered by or on behalf of the Company as provided herein
because the Company has been unable for any reason beyond its control and not
due to any default by it to comply with the terms and conditions hereof, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses, including fees and disbursements of counsel, actually or
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares, but the Company shall then be
28
under no further liability to the Underwriters except as provided in Section 6
and Section 8 hereof and in no event will the Company be liable to the
Underwriters for any loss of anticipated profits from transactions contemplated
by this Agreement.
12. The statements set forth in the last paragraph on the front cover page
of the Prospectus, the paragraph on the inside front cover of the Prospectus
containing stabilization language and the third and sixth paragraphs under the
caption "Underwriting" in the Prospectus constitute the only information
furnished by any Underwriter through the Representatives to the Company for
purposes of Sections 1(b), 1(c) and 8 hereof.
13. In all dealings hereunder, the Representatives shall act on behalf of
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives jointly or by Xxxxxxxx & Co.
Inc. on behalf of the Representatives.
All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, shall be in writing and, if to the
Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
the Representatives in care of Xxxxxxxx & Co. Inc. at Equitable Center, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department; and
if to the Company, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
the address of the Company set forth in the Registration Statement, Attention:
Chief Executive Officer; provided, however, that any notice to any Underwriter
pursuant to Section 8(d) hereof shall be delivered or sent by mail, telex or
facsimile transmission (subsequently confirmed by delivery or by letter sent by
mail) to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by Xxxxxxxx & Co. Inc. upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Section 8 and
Section 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
29
16. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
30
17. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement Among Underwriters, manually or facsimile
executed counterparts of which, to the extent practicable and upon request,
shall be submitted to the Company for examination, but without warranty on your
part as to the authority of the signers thereof. Upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
among you and the Company.
Very truly yours,
XXXXXXXXXX GRAPHICS
INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
-----------------------------------
Xxxxxxx X. Xxxxxxxxxx
Accepted as of the date hereof:
XXXXXXXX & CO. INC.
PRUDENTIAL SECURITIES
By: XXXXXXXX & CO. INC.
By:
--------------------------------
Name:
Title:
Acting on behalf of
themselves and as the
Representatives of the other
several Underwriters named in
Schedule I hereto.
31
SCHEDULE I
UNDERWRITERS
Number
of Firm Shares
to be Purchased
---------------
Xxxxxxxx & Co. Inc. .......................................... 1,050,000
Prudential Securities......................................... 1,050,000
Total.................................................... 2,100,000
=========
EXHIBIT A
SUBSIDIARIES
Xxxxxxxxxx Graphics, Inc.
Roda Limited
Roda Print Concepts Limited (a subsidiary of Roda Limited)
A-1
EXHIBIT B
____________ __, 1998
XXXXXXXX & CO. INC.
PRUDENTIAL SECURITIES
As Representatives of the several Underwriters
c/x Xxxxxxxx & Co. Inc.
Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
In order to induce the several Underwriters, for whom Shroder & Co. Inc.
and Prudential Securities are acting as representatives to underwrite a proposed
initial public offering (the "Offering") of shares of common stock, no par value
per share (the "Common Stock") of Xxxxxxxxxx Graphics International, Inc., a New
Jersey corporation (the "Company"), as contemplated by a registration statement
filed with the Securities and Exchange Commission on Form S-1 (Registration No.
333-46541), the undersigned hereby agrees that the undersigned will not,
directly or indirectly, for a period of 180 days after the commencement of the
Offering, without the prior written consent of Xxxxxxxx & Co. Inc., offer to
sell, sell, contract to sell, grant any option to purchase or otherwise dispose
(or announce any offer, sale, grant of any option to purchase or other
disposition) of any shares of Common Stock or any securities convertible into or
exchangeable for shares of Common Stock (except that the Company may grant
options to purchase or award shares of Common Stock under its stock option plans
and issue privately placed shares in connection with any acquisitions).
This letter shall have no further force or effect if the Company and the
Underwriters shall not have executed and delivered an underwriting agreement
related to the Offering by [_______ __, 1998] or if any underwriting agreement
entered into by such parties shall be terminated prior to the initial closing
date provided for therein.
This letter agreement shall not prohibit the undersigned from transferring
any shares of Common Stock to members of his or her immediate family or to a
trust for their benefit, provided that such persons or trust agree to be bound
by the terms hereof.
Very truly yours,
By:
--------------------------------
Name:
B-1
